Rep. Steve Stadelman: Why I voted for pension reform

Friday

Dec 6, 2013 at 12:00 PM

Illinois’ retirement systems are in jeopardy, and the pension-reform bill passed last week by the General Assembly is a bipartisan effort to rescue them. If you strip away all the rhetoric and emotion, that’s the bottom line.

Over the years, lawmakers have done very little to address the structural problems that threaten the state’s financial future and retirement benefits for its employees and for public school teachers.

Lawmakers themselves contributed to the funds’ combined $100 billion insolvency by not making required payments. Public employees are not at fault here. They made their payments.

But, as a freshman lawmaker, I can’t debate the past or accept the status quo. We need to figure out how to clean up this mess and fix the serious financial problems that endanger our state and its public pension systems.

Many factors influenced my decision to vote in favor of pension reform. It’s a very difficult issue, and lawmakers had no trouble finding reasons (or politically motivated excuses) to vote against SB1.

Either it went too far or it didn’t go far enough. The plan may not be perfect or the whole solution, but in my mind, it forces movement after years of inaction.

I understand employee concerns that this bill contains provisions that are unconstitutional, and I voted in favor of an earlier reform plan that was negotiated with unions and supported by them. Shortly after that vote, a special interest group informed me it was planning to file a lawsuit against the union-backed plan.

In this kind of environment, the reality is that no matter what plan the General Assembly approved, there will be a court challenge. We need to start that process and find out what the courts determine to be constitutional or not. If need be, the issue would come back to the Legislature to craft a plan in line with how the courts rule.

In a complicated political landscape, SB1 tries to find middle ground. An employee’s base pension is not affected, although there would be changes to cost-of-living increases. Employees and retirees with more years of service and smaller pensions would get greater protection from inflation.

In addition, in exchange for benefit cuts, employees will contribute 1 percent less of their salaries toward their pensions. And despite what you may have heard, reforms in the plan apply to lawmakers the same as everyone else.

I don’t believe we can or should tax our way out of the problem. Nor do I believe that continued inaction is a responsible option because the path we are on is unsustainable. In fiscal year 2008, the pension payment made up 6 percent of our General Revenue Fund. In the current fiscal year, the pension payment consumes 22 percent of our General Revenue Fund. In the meantime, the state has cut funding for education, the mentally ill and disabled, among other critical human services.

So as a new lawmaker, I had to ask myself: Where do we go from here? There is no simple or easy way out. SB1 could be a catalyst for relieving the state’s financial difficulties and keeping pension funds solvent so that citizens can depend on them as a source of income in retirement.

Steve Stadelman of Rockford represents the 34th District in the Illinois Senate.